The NAB Business Survey continues to point to a very favourable business environment for Australian firms, despite giving back some of the strong gains witnessed in last month’s survey. Service industries have persistently been the best performers, although other sectors are looking relatively upbeat – as the benefits of lower oil prices and earlier AUD depreciation continue to flow through. Given these result, we have maintained our upbeat near-term outlook for the Australian economy. However, subdued inflation pressures in the Survey and a very weak CPI result for Q1 suggest the RBA has scope to further cement the non-mining recovery with an additional cut to the cash rate at its next meeting (although it is likely to be a close call).
This month’s NAB Monthly Business Survey saw both business conditions and confidence retrace some of the strong gains witnessed last month, but overall outcomes continue to point to a business environment that is highly favourable to Australian firms. This is helping the Australian economy withstand global uncertainties and the transition through the end of the mining boom. There are also tentative signs that the non-mining recovery is becoming more broad-based, although it is too early to determine whether this recent trends will persist.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
